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Casual Conversion for large businesses: What you need to know about the changes

The September 27th deadline is looming for large businesses to determine their obligation to offer permanent employment to their long-term casual employees, so it’s time to get cracking!

In March this year, the Australian Parliament passed the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2021 which gave employers some greater, and much needed, clarity around their obligations to their casual employees. It also provided some employers with a greater administrative burden too – thanks ScoMo!

So, what changed?

For most businesses who have more than 15 employees, the obligation to request conversion from casual to permanent employment (full-time or part-time) now falls with the employer rather than the employee.

Before 27th September 2021, large employers need to assess the arrangements of each of their eligible casual employees work arrangements, to determine whether or not they are required to make an offer of casual conversion.

And by eligible employee, we mean one who:

  • Has been employed by you for 12 months; and
  • During at least the last six months, have worked a regular pattern of hours on an ongoing basis which could easily continue in a permanent capacity without significant adjustment.

If you have casual employees who fit the above criteria, you’ll now be required to make a written offer of casual conversion to them within 21 days of the employee reaching their 12-month anniversary or by the due date of 27th September. Your written offer will need to be for your employee to convert to:

  • Full-time employment, if your employee’s hours worked for at least the last 6 months have been the same as full-time hours, or
  • Part-time employment which is consistent with their regular pattern of hours worked for at least the last 6 months, if they have worked less than full-time hours for at least the last 6 months also.

We strongly suggest that you meet with your casual employees to discuss the situation with them prior to making the offer. These changes are complex and best practice in this area is to explain the changes as well as the employees’ rights in this situation.

Do I have to make an offer?

There are very limited reasons which will allow employers not to make an offer of casual conversion. If you are not making an offer, you will still need to write to your casual employees to notify them of your decision and the reasons why. Fair Work specifies that the only reasons why a large employer can not make an offer include:

  • Because the casual employee hasn’t worked a regular pattern of hours:
    • On an ongoing basis for at least the last 6 months
    • Which they could continue working as a permanent employee without significant changes
  • The business has reasonable grounds for not making an offer. If this is your decision, please be in touch with us so that we can help you to ensure that your decision not to make the offer is in fact reasonable within the guidelines.

Are there rules around the type of offer I make?

Of course, what is a legislation change if it doesn’t have layers upon layers of rules!

As mentioned, the offer you make must be in writing and it must also be consistent with the regular pattern of hours that the casual employee worked during the relevant period. This means that you need to look at the patterns of hours worked by the casual receiving the offer in the previous 6-12 months and make an offer of permanent employment which is consistent with that pattern.

It’s important too that you discuss with your employee the type of employment you are offering (ie. full-time or part-time), what their hours will be as a permanent employee and when these hours will start.

What happens if my employee accepts the offer?

If your employee accepts your offer of casual conversion, you’ll need to formalise the new employment arrangement in the form of an Employment Agreement, or an amended Employment Agreement, or some other form of written acceptance, within 21 days after the employee notifies you of their decision to accept.

The start date of the new permanent arrangement should be on the first day or first full pay period after you’ve provided your written acceptance, or on another mutually agreed date.

What happens if my employee declines the offer?

That’s ok, they don’t have to accept the offer of conversion. The important part is that you satisfy your obligations to provide them with the offer and then the decision rests with your employee. If you don’t receive a response from them, you can assume they’ve declined the offer and their employment continues in the same way.

Can my employees still request casual conversion if they decline my offer now?

Yep, they can. Employees will still be able to request casual conversion like they always have, if they meet a certain set of criteria too. Any request can only be made for an employee who has worked for you for more than 12 months and has had a regular pattern of working hours for at least the 6 months prior to their request. Other criteria may apply too so please be in touch for specific advice if you receive a request from your employee/s.

Is there anything else I need to do?

Large employers will also need to provide their existing causal employees with the new Casual Employment Information Statement (CEIS) as soon as practicable after 27th September. Remember too that you should be providing any new casual employees with a CEIS upon commencement of their employment.

But I have less than 15 employees, what about me?

If you fit Fair Work’s definition of a small business, being one with less than 15 employees, while you are still required to provide your casual employees with a copy of the CEIS and you are required to appropriately assess any eligible requests from your employees to convert from causal to permanent employment, you do not have any obligation to initiate this conversation with your employees.

We strongly recommend you seek expert HR advice if you do receive a request for casual conversion from your casual employees so that we can help you determine your obligations and the reasonable business requirements.

Like any new changes, it can feel a bit daunting to navigate them for the first time. That’s what we are here to help with. If reading this makes you feel a bit sick to the stomach, please give us a call and we can walk through this process with you or take care of it on your behalf.

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